Celebrating 100 years of liberals fighting the 'taxpayers' alliance'

Wednesday, 12 August 2009

Yesterday, obscure fact fans, was the 98th anniversary of the first Parliament Act*. The Parliament Act 1911 came about because of Asquith, Lloyd George and Churchill's 1909 'People's Budget' which proposed paying for, among other things, the first state pension with a rise in taxation aimed mostly at the most wealthy - and in particular proposed establishing a land tax.
The landed gentry wouldn't stand for that and, having control of the House of Lords, vetoed it. This lead to two general elections, Asquith threatening to fill the Lords with his own placemen and the aforementioned restrictions on the Upper House.
A mere historical footnote? Well, two new reports would like it to be the shape of things to come. With the economy in the mess that it is in, land taxes are back on the agenda. Labour pressure group Compass has produced this report calling for council tax to be replaced by land value taxation, while David Cooper from the Association of Land Tax and Economic Reform has written this report for Vince Cable (PDF).
Opposition to this has come, unsurprisingly, from the Conservatives. Tory housing spokesperson has attacked this as a tax on homeownership, which it certainly is, but doesn't appear to have engaged with the argument at all: specifically that the boom and bust cycle of the housing market is bad for the economy and encourages people to invest in property (a social necessity) and not stocks and shares.
Interestingly, the other critics are an organisation calling itself the Taxpayers' Alliance. Media darlings, the TPA has recently been increasingly moving away from its brief of supporting reduced taxes and onto telling us what kind of taxes we should have. Land Value Taxation, if introduced instead of other taxes such as council tax or income tax, could see most taxpayers paying less and only a minority paying more. So which taxpayers does this alliance represent exactly?
The answer appears to take us right back to the landowners in 1909. The First World War destroyed David Lloyd George and Winston Churchill's attempt to introduce land taxes back then; here's hoping history doesn't repeat itself.
* Declaration: James Graham works for Unlock Democracy, which runs the Elect the Lords Campaign. The views in this article are his own.